How Music Licensing Works

Tina Turner's Song "Simply the Best" was used in an ad campaign for Pepsi in 2000.

Let's say you are reading Rolling Stone magazine, and you find an article about an ad campaign that Phillips has launched. The ads feature the Beatles hit "Getting Better". In the article you read this:

But according to the licensing expert, the company no doubt "paid a fortune" for the Beatles hit: an estimated $1 million. The source suspects Gomez made no more than $100,000.

This ad campaign is using the Beatles song as the theme music. It is also using the voice of the lead singer of the band named Gomez laid on top of the Beatles original. The speculation is that Philips paid $1 million to use the song, and that Philips paid the band Gomez $100,000.

This is the world of music licensing -- a world where the rights to use music are bought and sold every day. This world is most obvious to us in a case like the one described in this example. A popular song that everyone knows gets embedded in a TV commercial or a popular movie.

It turns out, however, that music licensing is something that happens constantly, all around us. When you listen to music on the radio, that music is licensed. When you hear music in a restaurant, that music is licensed too. In this article, you will have the chance to learn about all the different forms that music licensing can take.